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When I do a count of all the rows in a table we have called production.dbug it tell me 1051
When I select all_tables.num_rows where table name = production.dbug it returns 937807
Why the huge difference?
It seems as if all_tables may be storing a high water mark?
Is this bad? The table is cleared every now and then( delete * ) should I do a truncate at that time?

DBA_TABLES reflects the row counts as of the last time the table was analyzed. Issuing a select count(*) from tabxyz will give you the exact number of rows in the table. For example:
SQL> create table xyz (x char(10), y char(10), z char(10));